After years of bleeding money, Nevada’s casinos area finally turning a profit.
But it’s not the high-roller gamblers helping the casinos see green – it’s the shoppers and diners infusing cash into the state’s industry.
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Nevada’s casinos, which in 2015 lost $662 million, made a profit last year for the first time since 2008.
The financial boost came from room rentals and fees generated by hotels dotting Las Vegas’ Strip and in Downtown Vegas, among other areas. According to the state Game Control Board in a report released last week, the majority of the $979 million that was generated came from resort lodging and hotel guests.
Nevada’s visitors are basically spending more money on things other than gambling. There is an ongoing trend that is pivoting to dining, shopping, and other amenities. People heading to Nevada to see a show, eat at a Michelin star restaurant or shop at a high-end boutique are choosing such experiences over casino tables and slot machines.
According to the report, gambling revenues last year dropped to 34.2% of total profit, the lowest percentage ever and a decrease from 34.9% the previous year. That’s a major change from 1990, when gambling revenue made up about 58% of total profit.
“Most significant is that the gaming winnings on the Strip was flat, while room income increased 8%,” said David Schwartz, the director for the Center of Gaming Research at UNLV. “If that trend continues, by 2019 Strip casinos will make more from their rooms than from their gambling.”
Schwartz said while gaming hasn’t recovered from pre-recession levels – spending on the Strip did reach heights not seen since the start of the Recession.
From a casino standpoint, Schwartz said, “a lot of major casinos cut their interest expenses pretty substantially by about half a billion dollars while charging more for rooms.”
There was also a record-breaking influx of tourists who visited the Strip in 2016. Las Vegas hosted 42.9 million visitors last year, a 1.5% increase from the previous year, according to statistics released by the Las Vegas Convention and Visitors Authority.